Despite US efforts to impose export controls on Nvidia’s high-end artificial intelligence (AI) chips, evidence has surfaced that shows China’s military-related entities, research centers, and universities have been able to acquire these chips. The Biden administration’s attempts to stop small distributors from reselling and smuggling the chips into the Chinese underground market have proven ineffective so far.
A document obtained by Reuters reveals that Chinese state entities have been procuring Nvidia’s A100 and A800 chips since October 2022. This includes purchases made by entities such as the People’s Liberation Army and defense research universities like the Harbin Institute of Technology and the University of Electronic Science and Technology of China. These chip suppliers are not authorized retailers approved by Nvidia, indicating that third parties may have resold the chips to China.
Violations of export controls are clearly visible, with sellers advertising these chips on social media and e-commerce platforms in China. These sellers, mainly from southern China, have secret supply channels that enable them to smuggle AI chips from overseas to mainland China. However, they do not provide any post-sale services.
The smuggling channels extend beyond mainland China, with products often passing through Malaysia, Singapore, and Hong Kong before they reach their final destination. Some sellers even require buyers to complete deals in Hong Kong to avoid detection.
US authorities have classified Hong Kong as a “foreign adversary” since 2021, along with mainland China, Iran, North Korea, and Russia. This classification means that products subject to US export controls cannot be shipped directly to Hong Kong. However, these products can be routed through third countries to evade the controls.
Despite efforts to close loopholes in export restrictions and prevent Chinese firms from accessing high-end chips, the US has struggled to find effective solutions to combat illegal resale and smuggling to China. Unless significant changes are implemented, China’s acquisition of Nvidia’s AI chips is likely to continue, posing potential risks to national security and technological competitiveness.
The source of the article is from the blog radiohotmusic.it